Costly Inspections and Limited Abatement: The Efficiency of Automobile Emissions Inspection and ...

203 Pages·2017·2.01 MB·English

ABSTRACT
GIGUERE,CHRISTOPHERSCOTT.CostlyInspectionsandLimitedAbatement:TheEfficiencyof
AutomobileInspectionandMaintenance(I/M)Programs.(UnderthedirectionofDr.Rogervon
Haefen.)
Thisdissertationinvestigatestheefficiencyofautomobileinspectionandmaintenance(I/M)
programs. Currently, 31 states and the District of Columbia use I/M to identity and repair (or
scrap)noncompliantautomobilesthatproducehighlevelsofemissions.Suchprogramsareusedin
theUnitedStatestoattainormaintaincompliancewithNationalAmbientAirQualityStandards
(NAAQS).RecentlyadoptedandproposedchangestotheNorthCarolina(NC)programmotivate
questionsabouttheefficiencyofI/Mthathavenotbeenansweredbypreviousliterature.Inchapter1
I explain the motivation for my research and discuss I/M in both the United States (U.S.) and
NorthCarolina.Inaddition,Idescriberecentlegislationthathaschanged,ormaychange,the
characteristicsoftheprograminNorthCarolina.
Inchapter2IdevelopacomprehensiveframeworktoevaluatetheefficiencyofI/M.Thisframe-
workrequirespredictionsfromsevenempiricalmodelsthatIestimateusinganextensivedataset
fromtheNorthCarolinaI/Mprogram.Mydataincludeallinspectionsbetween1999and2013as
wellasautomobileattributesprovidedbyEdmunds.com,Inc.andpubliclyavailableeconomicindi-
cators.IthenusethesevenpredictionstoestimatecostsandbenefitsfrombothI/Minducedrepairs
andscrappage.Finally,inchapter3andchapter4Iusetheresultsproducedbythisframeworkto
evaluatetheefficiencyoftwochangestoNorthCarolina'sprogram.
Inchapter3IfocusonevaluatingtheefficiencyofarecentchangetotheNorthCarolinaI/M
program.InApril2015thestateextendedinspectionexemptionstoautomobilesfromthemost
recentthreemodelyearswithlessthan70thousandmiles.Therearetwomainresultsfromthis
chapter.First,theNorthCarolinaI/Mprogram,asitexistedbetween1999and2013didnotpassa
benefit-costtest.Second,becausetherecentlyexemptautomobilesareunlikelytofailaninspection,
therecentchangeimprovesI/Mefficiency.Theimprovement,however,isnotenoughtochangethe
signoftotalnetbenefitsfromnegativetopositive.Furtherexemptionsoflowmileageautomobiles
havethepotentialtogeneratepositivenetbenefits.
InJuly2015theNorthCarolinaHouseofRepresentativesvotedtoeliminateI/Mfrom29ofthe48
countiescurrentlysubjecttoannualemissionsinspections.Inchapter4Iestimatetheefficiencyof
I/MunderthisregimeandfindthatitwillbeapotentialParetoimprovement.Becausethestatewide
programimposesmorecoststhanbenefitsonsocietyreducingthescopeoftheprogramcauses
thenegativenetbenefitstoincreasetowardszero.However,differencesindrivingbehaviorand
automobilechoicesbetweencountiesthatwillkeeporloseI/Myieldanunexpectedresult.The
countiesthatwouldloseI/Mifthelegislationbecomeslawaremorerural,havemoreintensively
drivenautomobiles,andhavehigherratesofnoncompliancethanthoseselectedtokeepI/M.Thus
ifI/Mwereinsteadkeptinthese29countiesandeliminatedintheother19thenetbenefitsofI/M
wouldincreaseevenmore.
Inchapter5Isummarizetheresultsandprovidesuggestionstopolicymakers.Inaddition,I
discusspotentiallimitationsofthedataandframework,aswellasapathforwardforfuturework.
©Copyright2017byChristopherScottGiguere
AllRightsReserved
CostlyInspectionsandLimitedAbatement:TheEfficiencyofAutomobile
InspectionandMaintenance(I/M)Programs
by
ChristopherScottGiguere
AdissertationsubmittedtotheGraduateFacultyof
NorthCarolinaStateUniversity
inpartialfulfillmentofthe
requirementsfortheDegreeof
DoctorofPhilosophy
Economics
Raleigh,NorthCarolina
2017
APPROVEDBY:
Dr.LauraTaylor Dr.WalterThurman
Dr.StevenSexton Dr.RogervonHaefen
ChairofAdvisoryCommittee
DEDICATION
Tomyparents.
ii
BIOGRAPHY
ChrisisanativeofFairfax,Virginia.Heearnedabachelorofbusinessadministration(BBA)with
majorsineconomicsandfinancefromJamesMadisonUniversityinHarrisonburg,Virginia.After
graduationChrisworkedforsixyearsincapitalprojectmanagementconsultingformajorprocess
industries.PriortoenrollinginthePh.D.EconomicsgraduateprogramatNorthCarolinaState
UniversityhetookmathematicscoursesatGeorgeMasonUniversityinFairfax,Virginia.Aftersix
yearslivinginRaleigh,NorthCarolina,ChrisandhispetsTurboDogandBattleCatmovedtoBlowing
Rock,NorthCarolina.HecurrentlyteacheseconomicsatAppalachianStateUniversityinBoone,
NorthCarolina.
iii
ACKNOWLEDGEMENTS
Firstandforemost,Iwouldliketothankmymom,Susan,forhersupportandencouragement.
WithoutitIcouldnothavecompletedthisprogram.
Iwouldalsoliketothankmycommittee:RogervonHaefen,LauraTaylor,WalterThurman,
andSteveSexton.Theyprovidedinvaluableconstructivecriticismasthisdissertationwaswritten.
Withouttheirexperience,time,andexpertisethisworkwouldhaveneverprogressedsofar.
Iwouldalsoliketothankthreeindividualsthathelpedpreparemeforgraduateschool.First,Dr.
WilliamC.WoodatJamesMadisonUniversitywasinstrumentalinmydecisiontopursueaPh.D.in
Economics.Helitthefireformyloveforeconomicsandtogetherwiththesecondindividual,Dr.
TimothyMichael,mademyundergraduateeconomicseducationandexcitingtimeinmyacademic
life.Third,EdwardMerrowwhohiredmeformyfirstrealworldjoboutofundergrad.Edpushed
metoworkhard,toreadbroadlyanddeeply,andteachmyselfcomplexinformationforsixyears.
WithouthisinspirationIwouldnothavepursuedaPh.D.andthusIwouldnotbeheretoday.
Severalindividualsalsohelpedmegather,collect,orcompilemyempiricaldata.DaveWillisat
theNorthCarolinaDivisionofAirQuality(DAQ)providedallemissionsinspectionrecords.Robert
SawyerattheNorthCarolinaDivisionofMotorVehicles(DMV)provideddataonI/Minspection
stations.ScottRuffnerandJuliusScottonassistedwithJavacodingnecessarytocollectdatafrom
Edmunds.com,Inc.Finally,IsmailElshareef,formerlyofEdmunds.com,Inc.helpedmetoquickly
extractdatafromtheEdmunds.com,Inc.applicationprograminterface(API).Thankyouall,without
yourhelpthisdissertationwouldnothavebeenpossible.
Thisdissertationhasalsobenefitedfromhelpfulcommentsfrompresentationaudiencemem-
bers.ThankyoutoDanBenjamin,RandyRucker,ReedWatson,BenFoster,PatO’Reilly,andother
participantsofthePropertyandEnvironmentResearchCenter(PERC)Summer2014Graduate
Fellowshiplectureseries.Also,thankyoutotheorganizersandconferenceparticipantsatCamp
Resources XXII in Asheville, North Carolina. Finally, thank you to the attendees of the Political
iv
EconomyandEnvironmentalPolicysessionattheAgriculturalandAppliedEconomicAssociation
(AAEA)2016annualmeetinginBoston,Massachusetts.
Inaddition,Iwouldliketothankmyfriendsandfamilyfortheirsupportoverthepastsixyears:
MattBarry,ArashEllini,JoshandStephanieFeltner,JonathanGiguere,MaryGiguere,BenandKristin
Johnston,AlandJaneJones,BillJones,JimandGenaJones,AlanMyers,KatieParker,Victorand
PegahPirowski,ScottandJenRuffner,andJoelThrockmorton.IfitwerenotforyouallIwouldhave
quitthisprogramyearsago.
Finally,thankyoutoallofmygraduateschoolfriendswhocommiseratedwithmeoverdrinks
atRaleighBrewingCompanyandAmedeo's.Youallmademelaugh,taughtmenewthingsabout
economicsandlife,andmadeanotherwisestressfulexperienceafunandenjoyablejourney–Scott
Callahan,LawsonConnor,ZackDaniel,RobertDinterman,SteveDundas,AlexGill,TimGrubb,
Kelsey Hample, Ashley Hungerford, E.C. Mabe, Josh Madson, Lee Parton, Irina Pritchett, Ford
Ramsey,StephanieRiche,AlexSereno,ParkerSheppard,andDallasWood.
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TABLEOFCONTENTS
LISTOFTABLES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . viii
LISTOFFIGURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x
LISTOFACRONYMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xii
Chapter1 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Motivation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Airemissionsandpolicyresponses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.3 I/MintheUnitedStates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.4 I/MinNorthCarolina . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.5 Literaturereview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.6 Outline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Chapter2 EstimationFramework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.2 Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2.3 ThebenefitsandcostsofI/M . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2.3.1 Probabilityofemissionsinspectionfailure . . . . . . . . . . . . . . . . . . . . . . . . . . 39
2.3.2 Therepair,waiver,scrappagechoice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
2.3.3 Gramsofemissionspermile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
2.3.4 Annualvehicle-milestraveled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
2.3.5 Instantaneousabatementfromrepairs . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
2.3.6 Automobileretirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
2.3.7 Inspectionduration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
2.4 Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
2.4.1 Probabilityofemissionsinspectionfailure . . . . . . . . . . . . . . . . . . . . . . . . . . 49
2.4.2 Therepair,waiver,scrappagechoice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
2.4.3 Gramsofemissionspermile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
2.4.4 Annualvehicle-milestraveled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
2.4.5 Instantaneousabatementfromrepairs . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
2.4.6 Automobileretirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
2.4.7 Inspectionduration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
2.5 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Chapter3 SelectiveAutomobileTargeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .103
3.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .103
3.2 Literaturereview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .106
3.3 Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .110
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3.4 Estimationframework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .110
3.5 Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .111
3.6 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .120
Chapter4 SelectiveSpatialTargeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .145
4.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .145
4.2 Literaturereview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .148
4.3 Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .153
4.4 Estimationframework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .154
4.5 Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .154
4.6 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .157
Chapter5 Conclusion,Limitations,andPathForward . . . . . . . . . . . . . . . . . . . . . . . . . .166
5.1 Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .166
5.2 Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .168
5.3 Pathforward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .170
Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .172
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